CarrAmerica's Bay Area managing director Chris Peatross tells GlobeSt.com his company tied up the building in May after Cell Genesys passed on its option to purchase the building upon its completion. "Everyone anticipated the company would exercise its option," says Peatross. "We were fortunate enough to follow everything and, when the tenant chose not to purchase, we stepped in and took their spot." The property never came to market, says Peatross.

Publicly traded Cell Genesys researches, develops and commercializes new therapies for the treatment of cancer. CarrAmerica's purchase price was $49.5 million, but they will hand over another $1.5 million if, as expected, Cell Genesys spends $5 million to build-out a 6,000- to 8,000-sf vivarium for studying mice, says Peatross. Cell Genesys has committed to lease the building for 15 years. Carr America's estimated year-one yield on the investment will be 14.7% and its going-in cap rate is 12.2% cash-on-cash), says Peatross.

South San Francisco has the largest concentration of biotech space in the US. The submarket has eight million sf of office space, six million sf of which is biotech space. The office space is 35% vacant. The biotech space is 9% vacant.